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lbh22308
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If i decide to cash out my 401k how much will be taken in taxes?

?I already know about the penalty, I just want to know if after the taxes are initially taken, will there be any other taxes on that withdrawal?

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2 Replies

If i decide to cash out my 401k how much will be taken in taxes?

Normally, 20% for Federal is withheld. Your actual tax due, though, may be more or less. Also remember State taxes.

If i decide to cash out my 401k how much will be taken in taxes?

The actual tax that you will pay depends on your marginal tax rate after added the distribution to your income.   The distribution is taxed as ordinary income so it depends on your total AGI and the taxable income after deductions.   If you end up in the 20% tax bracket and an early distribution then you would need to have 30% withheld. If in a higher tax bracket, then even more.

Plus any state tax.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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